More than half Japanese public oppose doubling of nation’s sales tax by 2015

Reuters, TOKYO

More than half the Japanese public oppose a proposed doubling of the country’s 5 percent sales tax by 2015, a newspaper poll showed yesterday, boding ill for the government’s plan to flesh out its proposed overhaul of taxes by a self-imposed year-end deadline.

The government is in the final stage of debate on sales tax hikes to pay for the rising cost of welfare payments, a step towards fiscal consolidation in a nation with public debt that is already twice the size of its US$5 trillion economy.

STRUGGLING

However, Japanese Prime Minister Yoshihiko Noda, a fiscal hawk who took office in September, is struggling to win broad support for the proposal to double the tax rate originally floated in June, with some ruling party members against it.

DISAPPROVAL

Among the public, those who disapprove of the sales tax increase is 53 percent, while more than 38 percent support it, a poll conducted at the weekend by the Nikkei Business Daily showed.

The sticking point in the ongoing debate is the exact timing of sales tax rises, along with which areas of welfare spending to expand and on tax credits for low-income families.

The Liberal Democratic Party, which controls the upper house, earlier this month voted to censure two of Noda’s ministers in the chamber, signaling he could face an uphill battle obtaining support for the tax plan.

The same Nikkei poll also showed that support for Noda’s government has dropped to 36 percent, a fall of over 30 points since he took office and much less than the 53 percent who disapprove of him.

POOR MANAGEMENT

Fifty percent of the latter cited Noda’s poor management of the government and the ruling party while 45 percent said he lacked leadership.